D471 Global Supply Chain Management - Set 1 - Part 2

Correct Answer: To adjust for changing market conditions or plant capacities

Regularly reconsidering the allocation of supply sources and markets ensures that the network adapts to shifts in demand, supply, or facility capabilities.

Correct Answer: They set constraints that impact how inventory, transportation, and information are used to reduce costs or increase responsiveness.

Network design decisions determine the configuration of the supply chain, setting limits on how inventory, transportation, and information can be optimized to achieve cost reductions or increased responsiveness.

Correct Answer: The customer placing an order and the retailer allocating product to fulfill the order

Customer order entry refers to the process where a customer places an order, and the retailer allocates the product to fulfill that order.

Correct Answer: Locating facilities in regions with the lowest costs

Firms that pursue cost leadership focus on finding the lowest-cost locations for their manufacturing facilities, even if it means locating far from customer markets.

Correct Answer: Locate facilities close to the markets they serve

Firms that emphasize responsiveness locate their facilities near their customers to reduce delivery times and better meet demand.

Correct Answer: To serve as a low-cost supply source for markets located outside the country

Offshore facilities are typically focused on producing goods at the lowest cost, primarily for markets outside the country where the facility is located.

Correct Answer: Supply the local market in response to tariff barriers or high logistics costs

Server facilities are built to supply specific markets, often to avoid tariffs or high logistics costs associated with supplying those markets from a distant location.

Correct Answer: Outpost facility

Outpost facilities are located in regions where specific knowledge or skills are concentrated, allowing the firm to access these resources for product or process development.

Correct Answer: Supplies the local market and is responsible for product customization, process improvements, or product development

Contributor facilities not only supply local markets but also take on responsibilities such as product customization and process improvements.

Correct Answer: Lead facility

Lead facilities focus on creating new products, processes, and technologies that can be used across the entire supply chain network.

Correct Answer: Set up local facilities to serve each country

When production technology is inflexible and product requirements differ across markets, it is necessary to establish local facilities to meet each countrys specific needs.

Correct Answer: Tariffs

Tariffs are duties imposed when products or equipment are moved across international borders, often impacting the cost of goods sold in different markets.

Correct Answer: Set up manufacturing plants within the country

To avoid high tariffs, companies may choose to establish local manufacturing facilities within the country, allowing them to serve the local market without incurring heavy import duties.

Correct Answer: It allows firms to shift production based on current exchange rates.

Building overcapacity and flexibility into a supply chain network enables firms to adjust production levels at different facilities based on factors such as exchange rates and demand fluctuations.

Correct Answer: Transportation, inventory, and facility costs

Total logistics costs are calculated by summing all costs associated with inventory, transportation, and the facilities used in the supply chain to deliver products to customers.

Correct Answer: At least equal the number that minimizes total logistics cost

The number of facilities in a supply chain network should meet the threshold that allows for optimal logistics cost efficiency, ensuring that the network can adequately serve customer demand without excess costs.

Correct Answer: Focus on finding the lowest-cost location for manufacturing, even if far from markets

Companies pursuing cost leadership aim to minimize production costs, often prioritizing low-cost manufacturing locations regardless of their distance from customer markets.

Correct Answer: Inventory

Inventory encompasses all goods available for sale and raw materials that are used in the production of finished goods, essential for meeting customer demand.

Correct Answer: To protect against unexpected demand fluctuations

Safety stock serves as a buffer against unexpected increases in demand or supply chain disruptions, ensuring that customer demand can still be met without delays.

Correct Answer: Peak demand

Peak demand occurs when there is a sudden increase in demand due to specific events, such as promotional campaigns or product launches.